The Direct Method of Allocating Service Department Costs Allocates Those

question 21

True/False

The direct method of allocating service department costs allocates those costs to operating departments only.

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Definitions:

Activity-based Costing System

An accounting method that assigns costs to products and services based on the activities and resources that go into creating them, providing more precise costing information.

Making Patterns

The process of creating templates or models to be used in manufacturing or craft projects, ensuring consistency and precision in production.

Product Diversity

Refers to the range of different products or services offered by a company, indicating the variety in a company's offerings.

Direct Labour

The workforce engaged directly in the manufacturing process, whose labor costs can be directly attributed to specific products.